maart 30, 2023
In times of economic upheaval, businesses need a vision or strategy that guides their investments in innovation toward a profitable future. But they also need to be able to realize that vision.
The ability to deliver value at pace in a changing environment will be a deciding factor in the survival of many businesses in the coming years. Companies that can rapidly test and validate new ideas, exploring and exploiting opportunities as they arise, will emerge strongest from uncertainty.
When it comes to digital innovation, it is now almost universally accepted that the Agile software development methodology offers the most effective framework. Agile’s iterative approach to development allows businesses to de-risk their innovation investments, and its focus on customer collaboration directs teams’ attention to what matters.
According to a global survey by analyst company Forrester Research in 2021, 89% of IT and digital decision-makers have either adopted Agile software development or are planning to do so.
There is a danger, however, that the way in which organizations implement Agile limits their ability to innovate. “The intention behind Agile can occasionally be lost,” says Nick White, former Data Strategy Director at Kin + Carta. Valtech acquired Kin + Carta in April 2024.
“It should be a set of principles but, for some companies, it runs the risk of becoming this new set of ceremonies they feel they have to observe.”
Done right, the Agile methodology empowers product teams to solve business problems creatively and focus their attention on customer needs. But if, in the name of business agility executives take away those teams’ autonomy, it can have the opposite effect.
As they prepare for uncertain times, business leaders should recommit to the values and principles of Agile to ensure they have the capacity to innovate, just when it is needed most.
Outcomes, not activities
One trap that organizations can fall into is to over-standardize ways of working in software development teams.
“The more we try to turn [software development] into engineering ... the more we miss the point about what actually makes great software work and, more importantly, what enables any software developer to be really engaged in the process of creation,” says Jeffrey Hammond, former Vice President, Principal Analyst at Forrester Research.
Instead, Hammond advises, leaders should trust teams to determine the tools and processes that help them get the job done. “Give teams autonomy to define what works for them, and then get out of the way,” he says.
Rather than dictating ways of working, or even specific features or functions to build, Agile teams should be charged with achieving business outcomes, says White. This unlocks their problem-solving capabilities. “It gets people thinking about the problem space. If you just tell someone to go build something and they have no context about why, they are less likely to pay attention.”
The goal is to define outcomes that are within the product team’s grasp, but which challenge them to think creatively. “People have to feel empowered to impact their key performance indicators,” White says.
Working out loud
As with Agile in general, this does not imply a free-for-all. Teams should be held accountable for their outcomes, although the objective is to learn what works, not punish teams who don’t hit a given number.
“It’s not about winning or losing,” White says. “It’s about understanding the result.”
Nor does Agile require any relaxation of governance or oversight. Even in heavily regulated sectors such as banking or government, organizations can achieve high levels of software delivery performance, as measured by metrics such as frequency of deployments and lead time for change.
The key, says Jamie Broadbent, head of Digital, Innovation and Design at global bank RBS International, is for Agile teams to be transparent about what they’re up to.
“Banks are set up as functional units and, historically, those units would be very insular with the innovators in a digital team working on something almost in isolation,” Broadbent explains. “Then compliance would hear about it, and it becomes a red flag. You really don’t want those car-crash moments when somebody is feeling blindsided.”
At RBS International, digital innovation is led by cross-functional teams working in full transparency so risks can be identified early.
“When we decide we want to go and explore something, risk and compliance and legal are on that journey from day one,” Broadbent says. “Our guiding principle is to work ‘out loud’ and be transparent with colleagues so we can get their input and buy-in as early in the journey as possible.”
This kind of transparency also ensures teams are aware of what is going on around them and learn from each other’s successes and failures, White adds.
“People have to keep talking, rather than disappearing into their own box to build something in isolation. That’s the opposite of what Agile is all about.”
Customer collaboration
To keep teams focused on business outcomes, lines of ownership must be clear. At all stages, the product manager decides what the team is delivering while the team focuses on how they will deliver it.
“A product manager is the CEO of their product,” White explains. “They need to understand their teams and, moreover, the business stakeholders they’re trying to serve.”
Forrester Research agrees. Clear lines of ownership are essential for scaling Agile practices, its research says, and businesses have more success when “they identify and empower business-led product ownership.”
Sometimes, though, product managers can be distracted from business outcomes by measures of productivity, such as throughput or velocity. Resolving this requires a renewed commitment to what is perhaps Agile’s most important value for businesses — and the one that is most likely to determine the success of innovation efforts: customer collaboration.
For Ben Pitman, Senior Director of Engineering at Valtech, organizations that want to deliver successful innovation at the speed that meets demand must never shift their focus away from customer needs.
The best way to start out on this user-focused journey, he suggests, is to begin with fast and cheap customer-focused experiments.
“When you have an idea, you start by validating it quickly with a conversation,” Pitman says. “You can go on to further de-risk by conducting more expensive experiments, like A/B testing, proportional to the cost of getting it wrong.”
Keeping customers in the loop throughout the development process reduces the risk that resources are sunk into an idea that offers no tangible business value, Pitman explains.
“There’s no point in knowing your customer better if your organization can’t adapt to this information,” he says. “Put the user testing into the same small squad as your engineers, your product manager — give them clear goals and watch them succeed.”
Rapid innovation
When Gordon Food Service, a distributor operating in the US and Canada, felt pressure from competitors to upgrade its ecommerce offering, they wanted to move quickly.
The company adopted a continuous integration/continuous delivery model for application development and built its new ordering app on Google’s Kubernetes Engine, allowing for rapid delivery of new functionality.
Crucial to the success of the project, however, was a customer-driven development methodology. This combined Scrum, the Agile project management framework, with elements of Extreme Programming (XP), including pair programming, in which two software developers collaborate closely, writing and testing code in rapid iterations.
Combining this rapid approach to software development with frequent feedback from customers allowed the company to quickly build ecommerce features that its customers truly valued.
Upshot
-
Go back to Agile’s principles and values. Don’t blindly follow the frameworks. The end goal is to serve customer needs by empowering your experts to work independently and learn from their success.
-
Product managers must work within and across teams. Ownership of products must be organized to progress toward a coherent product or service, and teams must communicate throughout.
-
Listen to customers, not formulas. Talk to customers. Make sure what is being proposed will solve a need. Meeting this need will ultimately deliver value to the business.
